The Right Way to Dissolve Your Corporation
Original Publish Date: Feb 23, 2016
There are many reasons why a business owner may choose to voluntarily dissolve their corporation. You might be closing because of market changes, starting a new opportunity, or retiring. Whatever the reason, it’s important to follow the right steps for corporate dissolution. Properly dissolving a corporation ensures you meet all legal and financial obligations, avoid penalties, and prevent future liabilities.
We’ll walk you through how to dissolve a corporation in Ontario and how we can make the process easier.
Why Would You Dissolve a Corporation?
A business may dissolve a company for many reasons:
- The business is no longer profitable
- You’re transitioning to a new business model
- You’re merging with another company
- You’re retiring or leaving the industry
Whatever the reason, properly ensuring your corporation ceases to exist is vital to avoid legal complications later.
How to Dissolve a Corporation in Canada
Understanding how to cancel a corporation is essential to avoid future liabilities and ensure compliance with legal requirements. The dissolution of an Ontario corporation involves several steps, from settling debts to filing the necessary documentation. Following these steps properly will help you complete your Ontario corporation dissolution efficiently.
Step 1: Reaching an Agreement with Shareholders
If your corporation has shareholders, you’ll need their approval to proceed. In most cases, this involves passing a Special Resolution to dissolve the corporation. Record a statement of intent to dissolve and include the date of the decision.
For larger corporations, consider consulting legal counsel to ensure compliance with the Business Corporations Act.
Step 2: Settling Debts & Liabilities
Before filing for dissolution, you must address any outstanding financial obligations. This includes:
- Paying off creditors
- Finalizing tax payments
- Distributing remaining assets among shareholders based on their ownership percentages
Resolve all property and liabilities the corporation owns before dissolving it.
Step 3: Filing Articles of Dissolution
After all stakeholders agree and you settle financial obligations, you can file the Articles of Dissolution. In Ontario, this involves submitting documentation through the Ontario Business Registry. Filing voluntary dissolution officially ends the corporation’s business operations and legally closes the business.
Requirements for Filing in Ontario:
- Corporation name and date incorporated
- Corporate number
- Company key (look up available)
- Declare that you have settled all debts and distributed all property
- Consent from shareholders to dissolve
For Federal corporations, submit filings to Corporations Canada to receive a Certificate of Dissolution upon approval.
Step 4: Notify Relevant Parties
To ensure a smooth transition, notify all affected parties, including:
- Employees: Inform them of the business closure and comply with termination rules under the Employment Standards Act.
- Suppliers & Vendors: Finalize any outstanding contracts or payments.
- Banks & Financial Institutions: Close business accounts and credit lines.
- Canada Revenue Agency (CRA): Close tax accounts such as HST, payroll, and corporate tax.
Each notification ensures no loose ends remain after the corporate dissolution.
Common Mistakes to Avoid When Dissolving a Corporation
While the process seems straightforward, some common mistakes can lead to delays or complications:
- Failing to File Necessary Documents: Without Articles of Dissolution, your corporation remains legally active.
- Not Settling All Liabilities: Resolve all debts, property, and liabilities to prevent future claims.
- Skipping Tax Obligations: Failing to inform the CRA can result in penalties. You may wish to consult an accountant before you dissolve.
Company Key Requirement for Dissolution
As of February 1, 2025, you must provide a company key to file Articles of Dissolution in Ontario.
- If you incorporated after October 19, 2021, a company key would have been automatically issued and sent to your corporation’s official email.
- If you registered before October 19, 2021, you need to request a company key before you can dissolve your business.
If you don’t have your company key or need help getting one, Ontario Business Central can assist you. You can select the “Get My Company Key” option on our Ontario Articles of Dissolution form. We make the process simple so you can complete your filing without delays.
Why Choose Ontario Business Central?
Here’s why thousands of business owners trust us every month:
- 30+ Years of Experience: We’ve been helping entrepreneurs navigate business registrations, changes, and dissolutions for over three decades.
- Access to the Ontario Business Registry: As an official intermediary, we have direct access to file documents online, ensuring faster processing times.
- Comprehensive Support: Our team is available to answer your questions and provide guidance via phone, email, or chat.
- Simple Online Portal: Our easy-to-use platform allows you to submit your information quickly, so we can take care of the rest.
Ontario Business Central handles every step professionally and efficiently. Begin the process today, and we will guide you through closing your business correctly.
Fast & Hassle-Free Filing
Time is of the essence, especially when you’re managing the complexities of closing a corporation in Ontario. Our team ensures that your Articles of Dissolution are prepared and submitted quickly. Prior to the Ministry update, a consent letter from the Ministry of Finance was required within 60 days. The Ministry of Finance consent letter is no longer required, making the process faster.
In most cases, we can complete the filing process within 3–7 business days for Ontario corporations. We can dissolve a Federal corporation within 24 hours.
Transparent Pricing with No Hidden Fees
Our pricing is clear and straightforward, with no hidden fees. Here’s a breakdown of the costs for dissolving an Ontario corporation through our service:
| Service | Fee |
|---|---|
| Ontario Articles of Dissolution | $163.90 + HST |
| Filing Fee with the Province | $43.99 + HST |
| Government Filing Fee | $25.00 |
| Handling | $29.95 + HST |
| Total | $293.76 |
For Federal corporations, the process is just as simple. We also offer extra services to cease the Federal corporation in Ontario during the dissolution.
| Service | Fee |
|---|---|
| Preparation of Federal Articles of Dissolution | $163.90 + HST |
| Handling | $15.00 + HST |
| Total | $202.15 |
| Ceasing Ontario Operations Fee | $87.99 + HST |
| Total with Extra Provincial Removal | $301.58 |
FAQs About Dissolving a Corporation
How Long Does the Dissolution Process Take?
The timeline depends on the jurisdiction. For Ontario, processing typically takes 3–7 business days. We typically complete Federal dissolutions within 24 hours.
What Happens if I Don’t File Articles of Dissolution?
Your corporation remains legally active, accruing tax obligations and other liabilities. Even if you stop running your business, you must dissolve the corporation to avoid these obligations.
Do I Need Legal Counsel to Dissolve My Corporation?
While not required, consulting a lawyer is advisable for corporations with complex structures.
Take the Right Steps to Close Your Corporation
Dissolving a corporation is a critical process that ensures your business operations end on solid legal and financial footing. By following the steps outlined above, you can avoid common pitfalls and complete your corporate dissolution efficiently.
If you’re ready to start, let Ontario Business Central help. Contact us today to file your Articles of Dissolution and take the first step towards closing your corporation properly.
inquiries@ontariobusinesscentral.ca
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Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.
